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Car-ma?

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Uber? What’s Uber? I can tell you what Uber isn’t. It isn’t $1 billion more valuable. But you know who is? Its rival Lyft, which just received a very hefty sum of money from Google’s parent company, Alphabet, following a very recent financing round that brings its total valuation to $11 billion. CapitalG, an Alphabet growth investment fund, will now get a seat on the board and an even cushier relationship with the ride-sharing company. Incidentally, Alphabet is also connected to Uber. However, that relationship went south when Uber went ahead and started developing autonomous cars that compete directly with Alphabet’s Waymo autonomous-driving technology. Naturally, that didn’t sit well with Alphabet. If you recall, and it’s totes okay if you don’t, Alphabet then sued Uber, alleging the beleaguered ride-sharing company committed trade secret theft. Some analysts believe that this little infusion from Alphabet is the company’s way of hitting back at Uber. Seems legit. In any case, it appears an IPO may be on the horizon for Lyft and if Alphabet’s throwing money at it, it might turn out to be a stock worth watching.

Unhappy anniversary…

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Today’s date marks an anniversary many would like to forget: The stock market crash of 1987, aka, Black Monday. It was exactly 30 years ago today that the Dow Jones Industrial Average (DJIA) crashed 508 points to a smidge past 1700. The index tanked by 22% and the shockwaves rippled all over the world. It was an even bigger one day drop than the stock market crash of 1929. But miraculously, the market recovered. Well, maybe not for everyone. In any case, this week (of all weeks), that very same index just hit a new record, breaking the 23,000 mark. To put it in perspective, if the DJIA crashed by 22% today, it would need to lose almost 6,000 points – heaven forbid! Poo poo poo. Some market experts warn that we could experience another disastrous drop. However, following the nightmare of Black Monday, certain safeguards, dubbed “circuit breakers,” were put into place that basically – and very conveniently – shut down the market after major drops. This prevents trading and sell-offs that could cause further damage. And basically, now if the S&P 500 falls either 7%, 13% or 20%, depending on certain factors, market trading is halted automatically. You are now free to breathe a sigh of relief.

Stick a fork in me…

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Nothing spells trouble like having to cut your workforce just four months after going public. Which brings us to Blue Apron, purveyor of fine meal-kits, which just found itself having to do just that. The fact is, there’s a lot of competition sprouting everywhere, from Amazon and its Whole Foods acquisition to Albertsons picking up the company Plated in order to sell their kits at the grocery chain’s 2000+ locations. For Blue Apron, it meant having to slash 6% of its workforce which amounts to about 300 employees. The stock is trading today at around $5.20 a share, down almost 50% from its IPO price back in June.

Grocery wars…

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That Amazon scooped up Whole Foods last week for $13.7 billion is, in fact, old news. But it’s also unpleasantly fresh in the minds of a number of competitors including Target, Costco and Krogers, who are feeling a slow burn in the form of tumbling shares. All while Amazon’s stock hit a new high today of $1017 per share. That’s right. A. New. High. And who can blame Amazon’c competitors for getting antsy about this new development? After all, we are talking about a $700 billion grocery industry in the United States. You can bet Walmart won’t be taking Amazon’s latest acquisition lightly, especially seeing as how 56% of its $486 billion revenue comes from its grocery sector. On the bright side, all those high prices that shoppers typically find at Whole Foods are rumored to be coming down, now that Amazon’s taking over the reins. On a sort of completely different note, it seems shares of Whole Foods have been steadily going up, causing many to wonder if the organic grocer will still be selling itself for that promised $42 per share.

Warren and peace…

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Looks like Senator Elizabeth Warren wont be doing her banking at Wells Fargo any time soon. The Democratic Senator from Massachusetts has set her sights on taking down some Wells Fargo board members and my money’s on Senator Warren. She wants the Federal Reserve to take action by ousting twelve board members who were around during 2011-2015, while the fraudulent account scandal was in full swing and rearing its ugly head. If you recall, over two million accounts were opened and the problem with that was that the customers whose names were on the accounts never actually approved opening them. Warren is arguing that under a Congressional statute the Fed has all the right in the world to give those twelve board members the old heave-ho if the financial institution in question engages in naughty business practices that involve breaking laws and other unsafe business practices that cause major losses. Warren told the Fed that it’s “done nothing” to hold the bank accountable so I guess she’s trying to steer it along.

Snap to it…

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Snapchat had a nice little boost today after news broke that the the company plans to make original programming with Time Warner. In fact, Time Warner is actually going to be handing over some $100 million to Snap for show development and advertisement for the next two years. Not bad for a company whose shares already tanked right back to its very recent IPO price last week. Snap already has one show a day you can watch on its platform, but with this new deal, viewers will get to watch two more shows a day. In case you were wondering who might be entertaining you via Snap’s original programming, rumor has it that Samantha Bee and Ellen DeGeneres will be making appearances. And as part of he deal, HBO, Turner and Warner Brothers will get to advertise to their heart’s delight on the platform. Sounds fair, no?

Next big thing?

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Looks like Snap Inc., the company that gave us Snapchat, is gearing up to be Wall Street’s next big IPO darling. Come March 1, the company is hoping to get an IPO valuation of between $19.5 – $22.2 billion, and is offering about 200 million shares on the New York Stock Exchange under the ticker symbol…wait for it…SNAP. You saw that one coming, didn’t you. It plans on pricing those shares between $14 to $16, which should bring in over $3 billion. The company already boasts 158 million active users and most of Snapchat’s money comes from advertisers. Revenues for the company came in this year at $404.4 million – a far cry from 2015’s $58.6 million. However, one hurdle Snapchat might have to overcome is the perennial question of how it plans to make a profit. Sure it took in over $400 million in revenue last year, but it still also posted a $514 million loss. In any case, before Snap Inc. makes its big Wall Street debut, top brass, including CEO Evan Spiegel, are set to hit the road, for a “road show,” – which is not as cool as it sounds – to visit investors in hopes of whetting their fiscal appetites on the potential of Snap Inc. stock. One hitch – and apparently there are more than a few – is that new shareholders won’t have any voting powers and instead will have to trust the board to know what they are doing in order to make tons of cash for the company.

What’s good for the goose…

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You don’t have to be Canadian to notice the swarms of people sporting the Canada Goose brand of winter gear. Chances are, if you’ve ever thought about buying one of those coats, you might have reconsidered after looking at the price tag. But apparently more than enough people are buying the brand’s merchandise to warrant a $100 million IPO filing, and Canada Goose will list on the New York Stock Exchange under the ticker symbol…wait for it…GOOS. Didn’t see that one coming, did ya? Okay, you probably did. While that $100 million isn’t exactly screaming: “SNAPCHAT!” the fact is Canada Goose’s revenue grew close to 40% between 2014 and 216, with just its online sales hitting $33 million in 2016. By 2016, revenue for the company came in at over $290 million. You may not have bought one of their jackets, but chances are, with figures like, that you know someone who did. In fact, in the last three years in the United States, sales grew by 76%, and 33% in the last year, to total over $103 million. In Canada those numbers only grew by 15%. Go figure. While Canada Goose still scored a $27 million profit on that $291 million revenue, it does still have a wee bit of debt to the tune of $278 million. So yeah, a few extra bucks from an IPO would do wonders. Of course, you can’t file for an IPO just on the basis of a few jackets. With that in mind, Canada Goose has big plans to expand its product offerings from footwear to bedding and everything in between.

Up for grabs…

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It was just a matter of time, I suppose, before Kate Spade threw in the fiscal towel and decided to put itself up for sale. Except, at Kate Spade, they’re calling it “exploring strategic alternatives.” However the company wants to spin it, it still heartened Wall Street which sent shares of the company up more than 13% for a change. To be fair, Kate Spade’s recent quarterly earnings weren’t even horrible. In fact, the company took in a 39% increase in profit of $86 million on $471 million in revenues, missing estimates by just one million measly dollars. The handbag company even added 41 cents per share when just 34 cents were expected. Shares are up over 20% for the year and sales of its merchandise in its own stores increased by over 9% . Its rivals, including Michael Kors and Coach would have loved to see similar results themselves. But alas, for Kate Spade, China just wasn’t feeling the love while a strong dollar kept plenty of tourist shoppers at bay. And in our neck of the woods, consumers just aren’t buying handbags as much as in the past, which is quite the problem when your core product is just that.

(Sigh…)

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The good news from Twitter’s latest earnings report is that its monthly active users increased by 2 million to 319 million accounts. Although forecasts were for 319.6 million. Just saying. Revenue also grew 10% to 717.2 million. However, that’s about all the good news there was, because the company missed estimates for revenues of $740.1 million, as ad revenues were lower, falling about .5% from last year’s $710 million to $638 million. In fact, Twitter experienced its slowest quarterly revenue growth since its IPO in 2013. To make matters infinitely worse, shares fell almost 12% on the news, and Twitter can’t afford to lose any more value from its shares. But CEO Jack Dorsey asked for patience, as the company he heads is making some investments into machine learning and figuring out exactly how to engage its advetisers. Seems like a prudent plan. But the bigger story is that President Trump’s tweeting did absolutely nothing for the company. Zero. Nil. Nada. Sure, the world got to see the kind of havoc that can be wreaked with just 140 characters. Unfortunately, that’s about all it did as his tweeting as Twitter reported that it actually experienced slower growth in the quarter that included the election. According to Twitter’s Chief Operating Officer, Anthony Noto, you can’t expect a “single person to drive sustained growth.” Meaning, Trump had no effect, President or not. The one bright spot – if you can call it that – is that Twitter earned 16 cents a share when estimates for 12 cents.

Mas tequila, por favor!

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Mexico had its first IPO since President Trump won the election back in November. The lucky IPO was tequila maker Jose Cuervo. The world’s biggest tequila company raised $900 million, with shares priced toward the top of the range at 34 pesos. That translates to roughly $1.67 per share. It’s pesos. What did you expect? The IPO had actually been put on hold twice, thanks to Trump, because his anti-NAFTA ambitions and wall-building enthusiasm kept weakening the peso. Interestingly enough, unlike other products, demand for tequila is not based on price. However, its price could get higher if Trump gets his way by slapping some major tariffs on the lime-friendly beverage. A move like that could put a major dent into Jose Cuervo, which gets 64% of its’s $1.165 billion in sales from the United States and Canada. At least Jose Cuervo always had the luxury of enjoying strong dollar-base earnings. That’s got to count for something, right? Problem is that the new expected U.S. protectionist measures could end up hurting that $1.165 billion. But maybe not. Because, after all, this is tequila we’re talking about. So maybe Americans will be willing shell out a few extra dollars.

A Whole lotta nothing…

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Whole Foods is looking anything but with its announcement that it will be closing nine stores. It’s the first time in almost a decade that the company had to resort to such measures as this quarter saw sales drop 2.4% when analysts only predicted a drop of 1.7%. Yikes. Whole Foods initially had a plan to open over 1,200 stores, but alas it was not meant to be as increasing competition and higher food prices led to the company’s sixth straight quarter of decreasing same store sales. The chain gained 39 cents per share which is was about what analysts expected, but as for its forecast, things aren’t exactly looking up. Whole Foods still operates 440 stores and believe it or not, six new stores are still expected to open, with another 80 stores in the planning stages.

Not electrifying…

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Tesla’s fourth quarter sales rose 27%, yet deliveries fell short with CEO Elon Musk pointing to production delays. And Tesla didn’t fall short according to Wall Street’s predictions but rather its very own. It may seem like a convenient excuse, but it’s a valid one that was also used to blame the company’s second quarter shortcomings. The electric car company delivered 22,000 cars in its last quarter, which was over 5,000 more than the same time last year. That might seem awfully impressive except that Tesla wanted that figure to top 25,000 vehicles. So now, that 3,000 car miss becomes an ugly smudge on the company’s fourth quarter earnings report. Tesla’s grand total of car deliveries for the year hit over 76,000. But once again, because Tesla went ahead and predicted that number would hit 80,000, it disappointed only itself. Setting forecasts he just can’t meet is a nasty habit that Elon Musk can’t seem to break. Production delays or not, maybe Tesla’s should stop trying to predict the future. Shares were down 11% for 2016 which marks the first time that Tesla reported an annual decline since its 2010 IPO. But miraculously those shares still rose today because Wall Street clearly has a thing for Elon Musk. Well, his company, anyway. Wall Street and consumers alike are waiting with bated breath to see if the much anticipated $35,000 Model 3 will actually surface this year. Some experts, however, think the more affordable model will only be making its grand debut in 2018. That still has’t stopped loyal Tesla buyers and enthusiasts from shelling out a total of $350,000 worth of deposits for the car.

Hatched…

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President-elect Donald Trump’s pick for Secretary of State, Rex Tillerson, reached a very lucrative retirement deal with ExxonMobil. If Tillerson does in fact get confirmed – and that’s still kind of iffy – then he’ll walk away from his post with $180 million comfortably nestled in a trust account. And that’s the approximate value of Tillerson’s 2 million deferred shares of the energy giant. Because he would not be allowed to own shares of the company if he took the post, the shares would get cashed out and put into an independently managed trust account. Besides dumping his ExxonMobil shares, Tillerson will not be allowed to work in the oil and gas industries for a period of ten years. Plus, he has to give up a cash bonus and other benefits that are worth another $7 million because he won’t be there in March, when he’ll have reached the company’s official retirement age that affords him the opportunity to collect on that $7 million package. But, that $180 million ought to tide him over. He’ll also need to agree to sever ties in order to avoid any conflicts of interest. Should he decide to return to the industry, then all that money would be given to charities of the main trustee’s choosing. But I did write that his confirmation is”iffy” because there are plenty of Congressional members who aren’t down with Tillerson’s cushy relationship with Russian president Vladimir Putin. That’s going to come up a lot during the confirmation hearings and it’ll probably be ugly, if not wholly entertaining.

And I choose you…

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Trump just announced his pick for Securities and Exchange Commission Chairman and it’s one that should surprise…no one. Enter Jay Clayton, a lawyer with the law firm Sullivan and Cromwell, who has plenty of experience with banks. Well, representing them, anyway. Besides banking clients, Clayton also defended a variety of “large financial institutions” against such entities as the Department of Justice, other government agencies and regulators and – get this – even the SEC itself. Some of his more notable achievements include representing everybody’s favorite Chinese e-commerce giant, Alibaba, when it made its grand IPO debut. He’s also represented Barclays when it unceremoniously scooped up Lehman Brothers, and Bear Stearns when JP Morgan took it on. You didn’t think we’d leave out Goldman Sachs, did you? Because he repped that one too. Word on the street is that Carl Icahn interviewed Clayton, along with several other candidates for the post. Presumably the two gentlemen discussed how to best undo obstructive banking regulations, Dodd-Frank and all those other pesky rules that have been casting a major downer on the financial world.

Fit to be fried…

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Planet Fitness made its New York Stock Exchange debut but it looked more like Planet Fizzle as the stock, which tried to open at the high end of its range, stumbled on its very first day of trading. The company, notable for its $10 gym membership fees, offered 13.5 million shares and managed to raise $216 million despite its less than impressive open. The company, however, tried to give a good showing on Wall Street today, cleverly handing out all sorts of yummy, unhealthy goodies while engaging the crowds with games like musical hand chairs. That was not a typo. Laugh all you want, but Planet Fitness has over 7 million members, 1 million of whom joined within the last twelve months. Its membership is up over 24% from last year. There are very few companies who pulled that off recently. By the way, the company has 33 straight quarters of growth under its svelte fiscal belt, and saw $280 million in revenue. Add that to its 976 stores in 47 states, Puerto Rico and Canada. and that 9% hit the stock took today doesn’t seem so bad after all.

Was it something I said…

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Things just keep getting fiscally uglier for Shamu and all his water-loving pals as Seaworld Entertainment cranks out yet another soggy quarter. Despite big promotions and a whale of a marketing campaign, attendance at the marine theme parks continued their downward slide. Brass at the company admitted they are continuing to deal with “brand challenges” which is basically code for the negative publicity the company suffered as a result of the very unflattering 2013 documentary “Blackfish.” And just how bad is attendance? Under 6.5 million people stopped by to hang out with the sea creatures, which was a 2% drop from the same time last year. Revenue, which was $391.6 million, is also down 3% from a year ago. But it’s the 85% plunge in profit, down to $5.8 million, that’s really got me questioning if people just don’t dig acrobatic dolphins and comedic sea lions.

If looks could kill…stereotypes…

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So what exactly does an engineer look like? Just ask 22 year old Isis Wenger. She’s got big plans to show the world on a billboard in San Francisco after some very rapid, enthusiastic crowd-funding. It all started when some people naively felt Wenger didn’t look like a “traditional” engineer. She then started the buzz-worthy hashtag #ILookLikeAnEngineer only to discover that there was a whole universe of engineers who also…look like engineers. 75,000 tweets later, including one from engineer and GM CEO, Mary Barra, not to mention a slew of other high-ranking female engineers from some of the world’s top companies, Wenger, together with engineer Michelle Glauser, started an Indiegogo campaign to put up a billboard in San Francisco featuring the diverse engineering community and its stereotypical misconceptions. Hoping to raise $3,500, they instead raised over $7,800…in less than 24 hours.

Like you expected anything different?

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Chinese e-commerce giant Alibaba dished out its very first earnings report since going public and surprised NO ONE! Revenue was up an insanely impressive 54% to $2.74 billion even though analysts only expected a “modest” $2.61 billion figure. Net income for the company was up 16% to $485 million which, incidentally, was not as much as hoped. But hey, that’s literally the price you pay to become a record-setting $25 billion IPO. If you recall, Alibaba (BABA) began trading at $68 per share when it made its Wall Street debut back in September. But if you’d like to purchase some shares today, you’re going to have whip out over $104 per share. I bet your kicking yourself over that one, huh? Alibaba’s active buyers are up 52% to 307 million users while the number of its mobile monthly users doubled. Yes. Doubled. No major IPO success story (or quarter) would be complete without bringing a little Hollywood glamour into the mix. Which is precisely why Alibaba Chairman, Jack Ma, has been kicking it in La La Land recently.

And they said it couldn’t be done…

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CVS can take a non-emphysemic sigh of relief now that its earnings came out. The company’s idea to kick the tobacco habit from its shelves in close to 8,00 stores did not prove to be a fiscal disaster after all. On the contrary, the company posted better than expected earnings – across the board! Ha! Who says tobacco always wins? Actually I don’t know if anybody has ever said that…but moving on. True the company did take a bit of a hit over its initiative to pull smoking products from its shelves but revenue still went up. In fact, it was up by 10% and $35 billion – $250 million more than analysts’ predictions. But it gets even better. Retail sales were up over 3% to about $16.7 billion. It turns out that CVS got a little boost from Americans covered under ACA and Medicaid. But the big boost came from (drumroll please…) prescription drugs. Oh the irony…out with tobacco and in with prescription drugs.

Attention K-Mart shoppers…

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Now you can get your Black Friday game on the day before. Which is, of course, Thanksgiving. In fact, if you are so jonesing for a shopping fix wile most people have yet to wake up and defrost their poultry, take comfort in knowing that you can mosey on over to you local K-Mart, which will be conveniently opening its doors at 6:00 am, and staying open until (Black)Friday November 28 at midnight. Warms the heart, no? While a slew of retailers have decided to begin the Black Friday chaos/fun/sales before most Americans even digest their Turkey, there’s a whole group of companies that have shunned the practice of opening on the national holiday and have taken to retail-shaming their fellow retailers. Why there’s even a page dedicated to the cause appropriately called Boycott Black Thursday. K-Mart insists that employees who work Thanksgiving day are doing so voluntarily for “holiday pay.” Even though K-Mart and other stores are opening earlier to beef up sales, oddly enough, last year K-Mart sales actually fell during the holiday season after instituting this new “working-holiday” tradition.